Alector Posts $124.6 Million in Third-Quarter Net Income After Ending GSK Agreement
Key Facts
Alector reported on November 5, 2026, third-quarter net income of $124.6 million, or $1.11 per share, compared with a net loss of $34.7 million, or $0.34 per share, in the same period of 2025. The company attributed a major part of the turnaround to higher collaboration revenue following the termination of its agreement with GSK. Collaboration revenue was $162.9 million in the quarter ended September 30, 2026, compared with $3.3 million a year earlier. The increase was primarily due to recognition of the remaining deferred revenue under the collaboration and license agreement with GSK. Alector said the termination notice it received on July 6 led to the extinguishment of its remaining performance obligations.
The accounting recognition was the main driver of the quarterly result, as collaboration revenue rose from the year-earlier quarter alongside the recognition of the remaining deferred revenue. According to the company's filing with the U.S. Securities and Exchange Commission, the agreement's termination becomes effective on January 2, 2027, 180 days after GSK's notice dated July 6, 2026. Alector and GSK announced in October 2025 that the phase 3 INFRONT-3 trial of latozinemab had not shown clinical benefit. In response to those results, they decided to discontinue the trial's open-label extension and the drug's continuation study. In April 2026, Alector said a futility analysis of the PROGRESS-AD trial concluded that the phase 2 trial of nivisnebart was unlikely to meet its primary endpoint, and it decided to stop the trial.
Research and development expenses totaled $30.0 million in the third quarter of 2026, compared with $29.4 million in the same period a year earlier. Alector said the increase was primarily due to option and license fees paid under its Spur agreement. This was partly offset by lower costs for the latozinemab and nivisnebart programs as work on them was scaled back, as well as lower employee costs following a workforce reduction. General and administrative expenses were $9.0 million, down from $11.5 million a year earlier. The company attributed the decline primarily to lower employee-related costs after reducing headcount.
Cash, cash equivalents and investments totaled $138.7 million as of September 30, 2026. Management said that balance, together with the upfront payment from Genentech and net proceeds from the public offering, is expected to fund Alector's operations through the second half of 2029. The company closed an offering on October 19 of 36.6 million shares at $2.05 per share, raising about $75.0 million in gross proceeds before discounts and expenses. Under its exclusive global agreement with Genentech, Alector announced that it was entitled to an upfront payment of $100 million. The agreement allows the company to receive up to an additional $1.17 billion upon achieving development, regulatory and commercial milestones, as well as tiered royalties on net sales, while Genentech assumes responsibility for development, regulatory affairs, manufacturing and commercialization.
The financing is tied to the company's plan to redirect its portfolio toward wholly owned programs, following the discontinuation of earlier clinical efforts and reduced spending on some programs. The chief executive said in the earnings statement: "Since our last quarterly update, we have granted Genentech an exclusive license to AL050, strengthened our balance sheet, and advanced our wholly owned programs closer to the clinic." Alector announced a workforce reduction of about 47% in October 2025, aiming to focus resources on priority programs and extend its cash runway through 2027. The company has now said its cash balance and financing tied to the Genentech agreement and offering support operations through the second half of 2029. This places the clinical advancement timelines for its programs among the next milestones announced by the company.
Alector aims to begin dosing healthy volunteers in Australia in the first human studies of AL137 no later than April 2027, after submitting an application to the country's Human Research Ethics Committee in October 2026. It also aims to submit a U.S. investigational new drug application in the second quarter of 2027, ahead of phase 1b studies in Alzheimer's disease patients. Separately, the company aims to begin the first human studies of AL164 and AL062 in the second quarter of 2028. AL164 is an RNA interference-based treatment targeting tau in Alzheimer's disease and other tauopathies, while AL062 targets alpha-synuclein, a protein associated with Parkinson's disease and Lewy body dementia. These timelines follow the company's announcement that its wholly owned programs were nearing clinical development.